In a statement, UEFA said City "overstated its sponsorship revenue in its accounts and in the break-even information submitted to UEFA between 2012 and 2016".

The club were also found guilty of "failing to cooperate in the investigation by the CFCB" and will be banned from Europe in the 2020/21 and 2021/22 seasons.

Manchester City Women's Football Club's involvement in the UEFA Women's Champions League will not be affected by the UEFA ban.

Premier League continue investigation

The Premier League is continuing its investigation into City and will not comment on any potential sanctions.

According to a report by The Independent, Manchester City are facing a Premier League points deduction, as their punishment for "serious breaches" of UEFA FFP also represents a breach of the domestic competition's regulations.

Man City to take case to CAS

Man City say they are "disappointed but not surprised" by the verdict, describing the process as "prejudicial", and will take the case to Court of Arbitration for Sport.

They released a statement, reading: "Manchester City is disappointed but not surprised by today's announcement by the UEFA Adjudicatory Chamber. The club has always anticipated the ultimate need to seek out an independent body and process to impartially consider the comprehensive body of irrefutable evidence in support of its position.

Are UEFA right to ban Manchester City from European competitions for the next two seasons?

"In December 2018, the UEFA Chief Investigator publicly previewed the outcome and sanction he intended to be delivered to Manchester City, before any investigation had even begun. The subsequent flawed and consistently leaked UEFA process he oversaw has meant that there was little doubt in the result that he would deliver. The club has formally complained to the UEFA Disciplinary body, a complaint which was validated by a CAS ruling.

"Simply put, this is a case initiated by UEFA, prosecuted by UEFA and judged by UEFA. With this prejudicial process now over, the club will pursue an impartial judgement as quickly as possible and will therefore, in the first instance, commence proceedings with the Court of Arbitration for Sport at the earliest opportunity."

1:42

Sky Sports News' Fraser Dainton is at the Etihad as Manchester City release a statement saying they will appeal their European ban

Sky Sports News' Fraser Dainton is at the Etihad as Manchester City release a statement saying they will appeal their European ban

Fifth place could qualify for Champions League

If Manchester City finish in the top four and their ban is upheld by CAS, it would mean a Champions League place would go to the team who finish fifth in the Premier League.

UEFA rule 4.08 states: "A club which is not admitted to the competition is replaced by the next best-placed club in the top domestic championship of the same association, provided the new club fulfils the admission criteria. In this case, the access list (see Annex A) is adjusted accordingly."

Sheffield United are currently fifth in the Premier League table on 39 points, two points ahead of Tottenham who have a game in hand.

0:44

Leicester boss Brendan Rodgers insists any potential ban for Man City will not affect his side's chances of reaching the Premier League top four.

Leicester boss Brendan Rodgers insists any potential ban for Man City will not affect his side's chances of reaching the Premier League top four.

What happens next?

Sky Sports News' chief news reporter Bryan Swanson explains what will happen now for Manchester City

Sky Sports News' chief news reporter Bryan Swanson explains what will happen now for Manchester City

Analysis from Sky Sports News' Chief Reporter Bryan Swanson...

"The fact Manchester City are going to appeal this is no big surprise, but this is still something of a shock in European football.

"What happens now is all roads lead to sleepy Lausanne in Switzerland, and the Court of Arbitration for Sport - the highest court in sport. It has presided over many high-profile cases in world football and it is where UEFA and Manchester City are going to go head to head.

"The stakes could hardly be higher and spare a thought too for the clubs sitting fifth and sixth in the Premier League in particular - Sheffield United and Tottenham - because ultimately, if this sanction does follow through, then that would have huge ramifications for the fourth place. That would then go to the fifth-placed team in the Premier League, who would then bump up a place and reach the Champions League for the next season.

"Certainly, this is not a process that is finished yet. It ultimately now leads to the courts."

Is this the end for Guardiola at the Etihad?

Guardiola's instant reaction will be to stand by the club, says Sky Sports News' Ben Ransom

Analysis from Sky Sports News reporter Ben Ransom…

"Guardiola wouldn't be human [if he wasn't now considering his future]. Most of your initial reaction when your club is apparently under attack is for everyone to batten down the hatches and come together as one. I'm sure his instant reaction will be to want to be a part of Man City and stand with the club.

"It's too early to say what he'll be thinking right now. In the short term, he'll be very unhappy at not being able to compete to win that elusive Champions League for Man City in the next two seasons, should he stay that long.

1:11

Pep Guardiola spoke about his Champions League ambitions earlier this week before the news of Manchester City's European ban emerged

Pep Guardiola spoke about his Champions League ambitions earlier this week before the news of Manchester City's European ban emerged

"From his point of view now, it will be about going as far as he can in the competition this season because it is the biggest trophy they are still competing for, given Liverpool's dominance in the Premier League.

"A lot will depend on the appeal and what City get back from the Court of Arbitration for Sport."

How did it get to this?

"This has been the result of a long-running dispute over UEFA's financial fair play rules. All those rules really say are that 'you can only spend what you earn'.

"Michel Platini, when he was president of UEFA, was worried clubs like PSG and Manchester City had very rich owners who could suddenly pump huge amounts of money into their clubs and gain a competitive advantage, so they introduced these rules.

"What UEFA have accused Manchester City of doing is 'gaming the system', inflating the amount of money they were bringing in from sponsorship deals so that they could show they were making more than they actually were, so they could spend more.

3:10

Football finance expert Kieran Maguire explains how Manchester City's European ban could affect the club as a business

Football finance expert Kieran Maguire explains how Manchester City's European ban could affect the club as a business

"All along the way, City have denied any wrongdoing whatsoever. They have always been very aggressive in defending the interest of their own club.

"This investigation has been going on for a while. It actually started when all the hacked emails of clubs and football agents by 'Football Leaks' ended up with a German magazine called Der Spiegel. They went through all these emails and came up with the story accusing City of breaking FFP rules, deceiving UEFA.

"The UEFA investigation was led by the former prime minister of Belgium - he decided that Manchester City were guilty of wrongdoing. The case was then handed to the judges of UEFA's Adjudicatory Chamber and they have come out and said the club should be banned from UEFA competitions for two seasons and be fined around £25m."

Why there is still hope for City fans

Analysis from Sky Sports News reporter Kaveh Solhekol…

"It comes as a huge surprise for a lot of people but for those following this story for a long time, it was always a possibility.

"This is by no means the end of this story. City are not going to go down without a fight. They will do everything possible to overturn the decision and get back into the Champions League. They have some of the best sportslawyers in the world working for them.

2:11

Sky Sports News' Ben Ransom explains the implications after City were banned from Europe for two years

Sky Sports News' Ben Ransom explains the implications after City were banned from Europe for two years

"Last year we were trying to make a short programme about the case and we tried to get in touch with some sports lawyers in London to interview - a lot of them could not take part because they were working for Manchester City. They will be working hard to get this overturned.

"If I was a Manchester City supporter, there is still hope this will get overturned at CAS."

'La Liga chief: Better late than never'

President of La Liga, Javier Tebas, says the decision to ban City from UEFA competitions for FFP breaches is "essential" to safeguard the future of the game.